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There is a benefit to filing for bankruptcy, especially if you are retired.

What could that be? The bankruptcy process will protect your retirement assets.

The Stigma of Bankruptcy Among Retirees

What filing for bankruptcy won't do, however, is protect you from the sense of stigma that some can feel. But knowing that you are no longer under the burden of mounting debt and harassment from creditors can - hopefully - help to relieve some of those feelings.

What can happen, especially among retirees, is a downward spiral as elderly parents attempt to cope with medical expenses in addition to helping adult children by spending retirement assets.

This can send some retirees into an ominous financial decline.

Before Filing for Bankruptcy, Negotiate with Creditors

It's always best to try to negotiate with creditors prior to filing for bankruptcy. Without initiating a negotiation process, you'll never know what type a settlement the creditor would've allowed.

And even though creditors may take some people to court, those creditors cannot touch your retirement assets - despite what they may threaten.

In Sonoma County, the last two years have seen rapid sales and eager buyers. If you're among those who formerly suffered a foreclosure or if you plan to purchase your first home, you may want to consider an FHA Loan.

The Federal Housing Administration's Roots

The government created the Federal Housing Administration in 1934 to help pull the nation out of the Depression and boost homeownership. The FHA accomplished this by making mortgages available to more people.

Back then, the benefits to the FHA program included:

lower down payments,

qualifying borrowers on their ability to repay the loan (and not on their business connections),

It can be especially painful when you're on disability, and your ex-spouse is unhappy with the sum the court orders you to pay in child support payments.

Melinda and David Daugherty, who live in Napa County, married and had two children. Then they divorced.

David was receiving Social Security disability payments, and his wife and children were receiving derivative Social Security disability payments. These are payments that the Social Security Administration automatically calculate and pay to spouses and children on the theory that disabled parents can't earn a reasonable salary and therefore the children, and in this case the wife, become eligible to receive benefits as well.

Melinda felt that the Napa County Superior Court erred when it didn't include the derivative payments as part of her ex-husband's income for the purpose of calculating his child support obligation.

She believed that the Social Security benefits that she and her children received should be considered as part of her husband's income. If the court combined derivative payments in addition to David's benefit, his child support payments would be considerably higher.

Melinda thought she had a good case and filed an appeal with the Court of Appeal of the State of California.

The justices didn't agree with her. They quoted prior authority in its affirmation of the trial court's decision and noted that because the children and Melinda were already receiving benefits as a result of David's disability, that the amounts they received should apply as credit to any obligation David had.

If you're reading this blog, you're probably a Boomer. A study released in February found that Americans who are over 50 years of age are twice as likely to divorce as people who were that age 20 years ago.

No one wants to have a midlife divorce, but it happens.

Women tend to file for divorce more often than men. Their reasons range from a renewed focus on their careers to a sense of empowerment. Interestingly, men are more reluctant to leave a marriage while children are still living at home. And according to the U.S. Census Bureau, more working women than men have college degrees.

Of course, there are always exceptions to the rule. There are cases in which a woman is more reluctant to leave the marriage. She may want to keep the family together to raise the children, or she might have taken a break from work to become a stay-at-home mom and is nervous about re-entering the workplace.

Social Security Tips for Divorced Women

Then there are women in their sixties or seventies who worry about Social Security. I have some good news that could lessen your worries in this regard. Women can receive Social Security survivor benefits based on the ex-husband's earnings provided you aren't remarried when you seek to collect them. In addition, he either has to be collecting his retirement benefits or you have to have been divorced for at least two years, and you must be at least age 62.

There's a familiar saying that goes something like this: If it sounds too good to be true, then it is too good to be true. Said another way, if it's too good to be true, it must be a scam.

Scams come in various forms. There are the solicitations promising to reduce your property taxes - if you pay a fee in advance - that arrive in envelopes that have that green, government-issued look to them.

Or the man that knocks on your door and promises to fix your car's fender at one-tenth the price that an auto body shop might charge you.

Then there are the promises lenders make as they convince that they can reduce your monthly mortgage payments and the interest rate on your loan, provided you pay their fees in advance. That might be the most sinister proposal of all.

These days, the Federal Trade Commission is cracking down on lenders taking advantage of homeowners in distressed situations. The FTC has taken action against six mortgage relief companies, sought orders stopping their illegal practices and freezing their assets pending litigation.

Do you find yourself laden with debt? Have you been tempted to contact a debt-settlement company that promises to reduce your debt by negotiating with your creditors?

A new report issued by the Center for Responsible Lending indicates that consumers who enroll in a debt settlement program may increase their debt by as much as 20%.

What Is Debt Settlement?

Debt settlement can occur when a company you retain negotiates with your creditors to accept a lump sum that is less than the amount you owe. Unsecured debt, such credit card and medical bills, are usually eligible for settlement. In a typical case, a consumer will contact a debt settlement company, enroll in a program, and pay a fee once the debt is settled.

It sounds great, doesn't it? But problems can and often do ensue.

The inherent problem of the debt settlement process is that these types of companies advise its clients to stop making payments to creditors. Ostensibly, this tactic is used to communicate to the creditors that the consumer is in trouble and to further entice the creditors to accept partial payments. However, when consumers stop paying their bills, their credit score plummets.

In addition, there are times when creditors refused to negotiate the debt owed. In those cases, consumers can become embroiled in continued collection activity and lawsuits.

Do you remember when a federal jury decided that Bank of America was guilty of selling subprime mortgages and ordered the bank to pay $863 million in damages? In that case, the US Justice Department argued that Countrywide, which Bank of America purchased in 2008, committed fraud by selling shoddy home loans over a two-year period to Fannie Mae and Freddie Mac.

Bank of America wasn't the only culprit. The US subprime mortgage crisis was the main culprit of the recession back in 2008. However, there were other factors contributing to the recession including the steady decline in home prices after peaking in mid-2006 and the percentage of households that became increasingly indebted. Inventive loan packages, such as easy initial terms and interest-only loans, were also to blame for the economic crash.

Industry experts agree that the banking and mortgage industries were mainly to blame. As a result, big banks became unpopular, and many private mortgage companies went out of business.

Are one or more debt collectors hounding you? Have you been tempted to authorize payment of your debt over the phone?

In a recent case, the Federal Trade Commission (FTC) determined that a Houston debt collection company - RTB Enterprises, Inc., which does business as Allied Data Corporation, and Raymond T. Blair - wrongly bullied English- and Spanish-speaking consumers and charged them transaction fees.

In addition, the FTC said the bill collectors were deceptive in their methods and claimed to be speaking on behalf of attorneys. Finally, the company threatened to sue consumers and coerced unsuspecting individuals to make payments toward their debts or reveal their personal information.

The FTC sued the debt collection company to rescind their contracts, provide restitution to consumers, and to stop the company from proceeding with its tactics.

The Case Against Houston-Based Allied Data Corporation

Allied Data Corporation had been engaged in third-party debt collection since 1993. Its clients included marketing companies, retail stores, retail websites and hospitals. Annually, Allied collected on one million accounts.

The FTC noted in its complaint that the company used more abusive debt collection tactics against Spanish-speaking consumers than those whose primary language was English. For example, the company's collectors claimed to be attorneys when they attempted to seek payment from Spanish-speaking consumers.

The collectors also warned that the case, if not closed, would head next to Allied's litigation or pre-litigation departments, even though those departments didn't exist within the company.

Oftentimes, Allied's employees would tell consumers that legal proceedings had already begun against the targeted consumers. They went so far as to convey file numbers to further intimidate individuals.

Perhaps worst of all, Allied's employees would tell consumers that they needed to pay the debt right away to avoid up to thousands of dollars of court fees. Allied made these threats even though it had no intention of suing the consumers they targeted. In fact, the lawsuit noted that Allied had no authority to sue consumers without seeking approval from their creditor clients.

You work hard for your money, and if you're employed by a public agency or a private company that allows employees to accrue sick and/or vacation leave, then the paid leave you accrue over time will eventually be converted to a cash payment when you retire.

So that cash, if you divorce, will be considered a shared asset and will need to be divided with your spouse.

Let's say you're the type of person who doesn't need to take vacations and who never gets sick. If you work for the County of Sonoma or the City of Santa Rosa for 30 years, when you retire you will not only have your retirement pay to look forward to but also a cash payment of your accrued sick and vacation leave.

Despite how difficult if may be for an unhappy couple to stay together and live in the same home, in most, but not all, cases it's best to file for bankruptcy first and complete that process before initiating divorce proceedings.

Chapter 7 vs. Chapter 13

To help you understand the differences between Chapter 7 and Chapter 13 bankruptcy filings, here are some explanations:

Chapter 7 Bankruptcy: Also known as liquidation bankruptcy, Chapter 7 allows for the discharge of unsecured debts including credit cards, medical bills and personal loans. In the average case, a person is usually able to exempt all their personal property. The Chapter 7 process can be completed in as little as 90 days, allowing you to begin rebuilding your financial standing and proceeding to the next phase, your divorce.

Chapter 13 bankruptcy: The Chapter 13 process allows you to create an affordable payment plan that gives you the chance to catch up on past due debts. The payment plan, lasting three to five years, gives you the opportunity to pay off lowered settlement amounts to your debtors and discharge your remaining debt once the plan is complete.

Buying a foreclosed house can be an economical way to purchase your starter home. In some cases, repairs may be needed or kitchens might need some remodeling but despite those improvement costs, there isn't a cheaper way to purchase a house.

In recent years, the real estate market has enjoyed a bounty of foreclosed properties for first-time buyers and investors to scoop up. Home prices began to slide by June 2007 and by 2008, 2,800 homes in Sonoma County were lost to foreclosure. Distressed sales peaked at 76% of all homes on the market in February 2009.

The Great Recession, which began with the subprime mortgage crisis, forced too many families out of their homes, which often ended up in foreclosure or a short sale. The good news is that the worst of the foreclosure crisis is behind us.

Don't worry about losing an opportunity to purchase a foreclosed home. There's always an opportunity to get a foothold in real estate by purchasing a home at an auction.

And there is always someone who figures out a way to defraud the foreclosure system.

When people think of divorcing couples, the image that most frequently comes to mind is a couple in their thirties or early forties battling over child custody and support.

Boomer Divorce Rate Is Also Higher in Remarriages

The overall national divorce rate has dropped in recent year. However, among boomers - the demographic known for protesting the Vietnam War and long hair - the rate has doubled, according to the National Center for Family & Marriage Research at Bowling Green State University. Those who are 50 and above now have a 1 in 4 chance of having a marriage end in divorce court.

If you think mature people who have already been divorced are smarter before tying the nuptial knot a second time, you're wrong, sadly. The rate of divorce is 2.5 times higher for those in this demographic who remarry.

In the United States, the divorce rate is 45 percent, which is the highest in the world.
Among boomers who are even older - 65+ - the divorce rate doubled from 5 percent to 10 percent. Among women, the percentage tripled between 1980 and 2008, from 4 percent to 12 percent.

Federal defense worker Rob Merritt was barely making ends meet when President Barack Obama and Congress reached an impasse, forcing many federal departments to come to a halt.

As soon as the shutdown began, visitors to national parks were turned away and U.S. residents found doors shuttered to other federal services. In many departments, large numbers of federal employees were furloughed, leaving those who remained poorly equipped to properly serve members of the public.

Even worse, the U.S. Department of Housing and Urban Development, which subsidizes housing costs for the nation's poor, slashed 8,360 employees from its normal rank of 8,709.

Some federally furloughed employees, some of whom have to continue to work without pay, are now like Merritt, financially vulnerable.

Merritt, who earns $80,000 annually, was already borrowing money using his credit cards to support his wife and four children. He accumulated an insurmountable amount of debt when he underwent heart surgery in April. His wife was in the process of changing careers but had to stop interviewing to help take care of her husband.

If Merritt had been furloughed - like tens of thousands of other federal workers - he would be filing for bankruptcy right now. He's one of the luckier federal employees. Although his check will be delayed, he will eventually receive one - unlike furloughed employees who aren't working and won't ever be able to recoup the lost income.

Are you being hounded by debt collectors? Did you know that you have rights that can protect you from unscrupulous collection agencies?

A San Francisco federal judge recently approved a preliminary $3.2 million settlement in a class action lawsuit involving a private debt collector who posed as a district attorney in an attempt to collect $20 million from overburdened and scared consumers.

Case Summary

Corrective Solutions, the debt collector in this case, contracted with district attorneys to collect on bounced checks. Then the company targeted consumers with a history of bounced checks.

Corrective Solutions sent the consumers letters on phony district attorney letterhead, threatened them with jail time, and suggested that collection fees of up to $200 would be applied to each check that had bounced.

The debt collector lost his case when a preliminary settlement was reached earlier this month. A final hearing on the settlement is scheduled for January 2014.

This wasn't the first time Corrective Solutions had to deal with unhappy consumers and the justice system. Corrective Solutions was previously called National Corrective Group, Inc., which filed for Chapter 11 Bankruptcy four years ago to avoid four class action lawsuits in several states.